Reliance Jio lays off around 5000 staff: Report

Mukesh Ambani-led Reliance Jio has piercingly reduced the number of contracted employees, along with some permanent staff, as the company strives to cut costs and improve operating margins.

The company has asked nearly 5,000 staff to leave including 500-600 permanent employees. However, the publication could not verify this number independently.

Reliance Jio, still said that it continues to be a net recruiter and there was no question of any "cost pressure-led action".

A Jio spokesperson said, "We are expanding our consumer businesses and Jio continues to be a net recruiter in the industry. We also work with contractors who may be hiring staff on fixed time contracts for our various project construction activities. Given we continue to recruit actively, the question of a cost pressure led action is not relevant."

Jio's operating margin fell in the January-March quarter by 5 basis points on quarter to 39% while its total expenses increased by almost 8% consecutively, on the back of higher network operating costs, finance expenses and depreciation & amortization charges.

"The impact has been mostly in the customer-acquisition segment," said one of the people as per ET. The manpower rationalisation started at least a quarter ago, and the cost-stretching is expected to continue. "Managers have been told to reduce team sizes. The areas that are getting impacted are administration, supply chain, finance and HR," old another person to the business daily on condition of anonymity.

Though, a Jio spokesperson said, "We are expanding our consumer businesses and Jio continues to be a net recruiter in the industry. We also work with contractors who may be hiring staff on fixed time contracts for our various project construction activities. Given we continue to recruit actively, the question of a cost pressure-led action is not relevant."

As per the ET report, Jio has 15,000-20,000 employees on its payrolls but actually, a much larger number of people work for the telco as third-party employees. Third party employees are hired by a staffing firm which in turn gets payment from the company for which these employees work. In this case, Jio didn't comment on specific numbers.

A report says employee costs typically range 5-6% amid telecom operators and companies working to control costs tend to target the workforce first. The major redundancies have been on the consumer-facing side, other impacted areas include supply chain, HR, finance, administration and networks.